CC shrugs off downturn blues

Along with A&O, firm leads the way in magic circle turnover rises

You could slice a knife down the middle of last week’s magic circle financial results: Freshfields Bruckhaus Deringer and Linklaters both announced fairly static revenue and average profit per equity partner (PEP), while Allen & Overy (A&O) and Clifford Chance posted larger turnover rises.

Clifford Chance will probably be happiest, with revenue up by 7 per cent to £1.30bn for 2011-12 and PEP up by the same proportion, to £1.1m. After breaking through the £1m barrier last year following years of lower profitability, the Canary Wharf firm is back on track.

A&O’s PEP is equal to Clifford Chance’s, but consistent with the previous year’s. A&O’s turnover, meanwhile, rose by 6 per cent to £1.18bn, meaning it overtakes Freshfields in The Lawyer’s UK 200 ranking for the first time.

In the revenue war Clifford Chance has pulled away from Linklaters, which posted fee income of £1.21bn, a rise of less than 1 per cent. It now trails Clifford Chance in revenue by some £100m, compared with £19m last year.

Freshfields’ turnover is roughly static at £1.14bn, putting it below A&O after the rival’s upturn. Freshfields remains top for PEP, clocking up £1.30m – down by 1 per cent on last year.

Linklaters’ PEP of £1.18m represented a 3 per cent drop on its £1.23m in 2010-11.

However, its PEP for 2011-12 is £1.24m taking into account partners who receive only a proportion of their earnings as an equity partner due to their being in a jurisdiction where the market does not support full-equity status.

Freshfields does not provide a breakdown by practice area or region, but Linklaters does, revealing an interesting rise in corporate turnover to £484m, making this the firm’s biggest practice group by this measure. Corporate drops to second place, with 39 per cent of turnover (£464.8m) generated in that area.

Magic circle leaders were quick to point to market conditions – Freshfields chief executive Ted Burke referred to the “turmoil” in the eurozone, while Linklaters global managing partner Simon Davies highlighted “wider economic strains”.

All this did not seem to do Clifford Chance too much harm.